Ayumu Tanaka, 17 January 2016

Firms that engage in international markets tend to pay higher wages. This column provides new evidence on the wage premiums for exporters and multinational firms in Japan. The results show that wage premium for foreign-owned firms is far more important than that for exporters and domestically owned multinational firms.

Takanori Ago, Tadashi Morita, Takatoshi Tabuchi, Kazuhiro Yamamoto, 04 January 2016

There are common geographical differences in working hours between countries and regions. Working hours are longer in developing countries, as well as in more urbanised regions compared to rural ones. This column explains these differences with two key factors: production technology and urban agglomeration. Technological progress leads to a decrease in working hours, whereas urban agglomeration leads to an increase.

Yasuyuki Todo, 24 December 2015

The Trans-Pacific Partnership (TPP) agreement was reached in October following seven years of negotiations. This column examines how Japan can maximise the TPP’s effect on its economy, identifying several additional policies that will be necessary. These include support for Japanese small and medium enterprises seeking to expand operations overseas, and policies that encourage and ease incoming foreign direct investment.

Kazuhito Yamashita, 02 January 2016

The Trans-Pacific Partnership is being held up as a model for 21st century trade agreements. This column looks into its implications for Japan. It says that agricultural sectors such as rice and beef won’t be affected as some form of protection will remain. It concludes that while the TPP may help Japan gain access to foreign markets, Japanese agriculture has lost another opportunity for revitalisation.

Willem Thorbecke, 21 December 2015

A good understanding of the evolution of exports over the years is crucial for the design of trade policy. This column dissects Japanese exports using a gravity model and concludes that it would be beneficial for Japanese companies to diversify their exports by shipping more to China, Europe, and South Korea.

Jamal Ibrahim Haidar, Takeo Hoshi, 21 October 2015

The Abe administration has outlined a desire for Japan to rank among the top three OECD countries in the World Bank’s Doing Business ranking. This column uses the Doing Business ranking itself to identify potential reforms the country could pursue to improve its position. Several politically viable, non-judicial reforms could quickly and easily move Japan up in the ranking. The approach highlights how the Doing Business rankings can be used to inform policy reform discussions.

Hiroyuki Motegi, Yoshinori Nishimura, Kazuyuki Terada, 25 September 2015

It is still not clear whether the effect of retirement on health is positive or negative. This column discusses new evidence from Japan showing that it is likely positive. In Japan, elderly people reduce their smoking and drinking after retirement. People tend to smoke and drink with their colleagues, so the result is mostly due to a peer effect.

Hiroshi Yoshikawa, Hideaki Aoyama, Yoshi Fujiwara, Hiroshi Iyetomi, 05 September 2015

Deflation is a threat to the macroeconomy. Japan had suffered from deflation for more than a decade, and now, Europe is facing it. To combat deflation under the zero interest bound, the Bank of Japan and the European Central Bank have resorted to quantitative easing, or increasing the money supply. This column explores its effectiveness, through the application of novel methods to distinguish signals from noises.

Toshihiro Okubo, Yukako Ono, Yukiko Umeno Saito, 04 September 2015

The productivity of a firm depends on its interaction with its suppliers and customers. This column uses unique data from Japan to investigate the wholesalers’ role in transaction networks, considering both sides of the transaction. The likelihood that a firm uses wholesalers increases with smaller buyer-side firms and larger seller-side firms. In addition, wholesalers tend to be located closer to their manufacturing buyers and further from their manufacturing sellers than manufacturers are to their direct manufacturing partners.

Kaoru Hosono, Daisuke Miyakawa, Miho Takizawa, 27 August 2015

‘Learning by exporting’ refers to productivity gains experienced by firms after they commence exporting. Such gains are argued to be due to access to new knowledge and resources. This column explores some of the preconditions for learning-by-exporting effects, using data on the overseas activities and affiliations of Japanese firms. Firms that enter markets in which they don’t have affiliates or subsidiaries are found to enjoy the most learning-by-exporting productivity gains. These findings have implications for the timing of new market entry.

Peng Xu, 03 August 2015

Corporate Japan is known for avoiding uncertainty. This is one of the reasons why changes of any kind are difficult – but not impossible – to realise. This column employs firm data to show that foreign direct investment has been changing corporate Japan by pursuing risk taking in private Japanese firms. This risk taking is positively related to firms’ sales growth and corporate earnings.

Dale W. Jorgenson, Koji Nomura, Jon D. Samuels, 08 July 2015

The two lost decades in Japan and the Global Crisis of 2007–2009 have created new opportunities for economic growth. This column describes the evolution of productivity across sectors in Japan and the US and suggests that the greatest payoffs for Japan would come from combining the Trans-Pacific Partnership with domestic reforms and encouraging foreign direct investment.  

Jean-Pascal Bassino, Stephen Broadberry, Kyoji Fukao, Bishnupriya Gupta, Masanori Takashima, 01 July 2015

Japan was the first Asian nation to achieve modern economic growth. This column discusses new evidence suggesting that Japan’s growth started from a lower level than Britain’s and grew more slowly until the Meiji Restoration. The key to understanding modern economic growth seems to lie in identifying the forces that dampened growth reversals, rather than the forces responsible for growth itself.

Takatoshi Ito, Satoshi Koibuchi, Kiyotaka Sato, Junko Shimizu, 29 June 2015

Japanese firms have been struggling with the yen’s volatility ever since the peg was dropped in 1973. This column, based on a recent survey of Japanese firms, argues that many firms have managed their exchange rate exposure by using operational and financial hedging strategies. It also finds that firms employing currency hedge and invoicing exports in yen are judged by the market to have reduced currency exposures. 

Petr Matous, Yasuyuki Todo, 16 June 2015

Japanese business groups, or keiretsu – cartels of companies with interlocking interests – have contributed much to the success of Japanese manufacturing in the 20th century. This column explores the future of this form of corporate governance, amid increasing calls for their dissolution. An examination of trade networks in the automotive industry shows that automakers no longer exhibit a preference for dealing with keiretsu partners. Globalisation, procurement scandals, and advances in modularisation have helped to erode the benefits of these long-term relationships.

Masayuki Morikawa, 22 May 2015

World trade in services is increasing rapidly but micro evidence remains scarce. This column employs firm data from Japan to argue that service-exporting firms are more productive than non-exporting firms and goods-exporting firms. Information asymmetry, transportation costs, differences in institutions, cultures, and languages increase the fixed costs of service trade. Therefore, highly productive firms are more likely to self-select into service trade.   

Tomohiko Inui, Makiko Nakamuro, Kazuma Edamura, Junko Ozawa, 02 May 2015

In order to achieve sustainable growth, Japan should make an efficient use of its labour force. However, female labour force participation and the share of women in leading positions in Japan remain low. This column investigates the impact of board diversity on firms’ innovative activity using Japanese firm-level data. The findings suggest that board diversity is associated with innovation only for firms that have already acquired diverse management skills.

Yuko Kinoshita, Fang Guo, 31 March 2015

Japan and Korea need to encourage female labour market participation to counter acute labour shortages. This column argues that following Nordic countries’ experiences, it would be possible to achieve both high female labour force participation rate and fertility rate. However, this is only possible if supported by appropriate public and private sector policies.

Hirofumi Uchida, Arito Ono, 11 February 2015

It seems like natural disasters should harm the economy by destroying lives and capital. This column investigates the extent to which disasters can lead to creative destruction through ‘natural selection’ of the fittest firms. Surprisingly, the rate of closure due to bankruptcy decreases – perhaps due to aid. Firm exits following the Tohoku earthquake were predominantly voluntary closures, with firms seizing the moment in order to leave an ageing market.

Hiroyasu Inoue, Kentaro Nakajima, Yukiko Umeno Saito, 11 February 2015

Despite vast improvements in information and communications technology, the tendency of firms in related industries to cluster together hardly changed between 1985 and 2005. This column examines the relationship between geographic clustering and innovation using establishment-level data from Japan. Research establishments – especially those in high-technology industries – are more localised than average. The degree of localisation is greater when establishments are weighted by their creativity, as measured by the number of patents created and the number of citations received.

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